Which of the following is not an example of a principal trying to solve the moral-hazard problem? The principal
a. calls the agent's references.
b. installs hidden cameras to monitor the agent's behavior.
c. pays the agent efficiency wages.
d. pays the agent a year-end bonus.
a
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Refer to the following graphs.
Which of the graphs correctly labels the axes of the AS-AD model?
A. Graph (1) B. Graph (2) C. Graph (3) D. Graph (4)
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more negative (or less positive). b. Real GDP and current international transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. Real GDP falls, and current international transactions become more negative (or less positive). e. Real GDP rises, and current international transactions remain the same.
A corrective tax places a price on the right to pollute
a. True b. False Indicate whether the statement is true or false
A price ceiling is
a. often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. b. a legal maximum on the price at which a good can be sold. c. often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. d. All of the above are correct.